1. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 1 of 25 Implementation Procedures Richard de Neufville Professor of Engineering Systems and of Civil and Environmental Engineering MIT

2. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 2 of 25 The Mantra ● It’s not enough to have a good idea, you have to know how to move the furniture around. ● Flexibility that we cannot implement when needed, is ‘worthless’

3. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 3 of 25 Outline ● Common Obstacles –Ignorance –Inattention –Failure to Plan –Stakeholder Block –External Developments l Initial Preventive Actions –What you do at start l Ongoing Operational Actions –What you do to keep options “alive”

4. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 4 of 25 Obstacle: Ignorance ● Concept: Future Managers or Systems Operators forget or otherwise ignore that flexibility exists l How hard is that? l Example: Bluewater parking garage – designers built in steel – initial developer did not use flexibility – Sold facility after it became profitable (low risk) – Investment trust outsourced management – In any case, flexibility “out of sight, out of mind”

5. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 5 of 25 Obstacle: Inattention ● Concept: To use flexibility well, system operators must do so at suitable time ● Why is this? Is this easy to do? ● Sometimes self evident: –Flat tire needs changing –Flexible manufacturing –“Swing gates” (international/domestic) at airports ● Sometimes not: –When should owner add floors to building? –Part of organization aware of need (e.g. operators) often cannot influence designers, budget process

6. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 6 of 25 Obstacle: Failure to Plan Ahead ● Concept: Initial design does not ‘think ahead’ and thus makes future expansion or change very difficult ● Can you think of cases? l Common example: Locating heating/cooling plant close to main facilities (hospital, airport terminal) –Proximity saves on energy loss, also on expensive ductwork –But then power plant blocks future expansion of main facility!

7. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 7 of 25 Obstacle: Stakeholder Block ● Concept: Stakeholders may block the use of a flexibility because it harms them ● Is this a likely problem? ● Yes! Very common in fact ● Between organizations, which normally have different interests – the reason they exist –Example: Newcastle Hospital ● Also within organizations! How is this possible? –Part of organization that wants to use flexibility to expand often cannot get other parts to execute –Example: Broadcast satellites - conflict between sales and operators (risk-averse and no budget)

8. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 8 of 25 Stakeholder Block: Example ● Example of internal stakeholder blocking flexibility in operations: ● Experience at HP; concerns DRAMs (chips widely used in electronic products) –Business Units for products recognize need and want flexible supply of DRAMs, to benefit from possible high demands from DRAM using products –Procurement division judged on ability to get DRAMs (and other resources) inexpensively; thus not interested in paying for ability to increase supply –Procurement “won” –and company lost when DRAM shortage prevented HP for profiting from high demand

9. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 9 of 25 Obstacle: External Developments ● Concept: Outside forces prevent the use of some flexibility – or nullify its value l Is this common? l Definitely! –New Government rules (e.g., zoning codes) –New Technology reduces or eliminates value of expansion

10. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 10 of 25 So, what do we do? l Initial Preventive Actions: What you do at start –Integrated Project Delivery –Development of ‘game plan’ –Anticipating Developments l Ongoing Operational Actions: What you do to keep options “alive” –Maintaining rights to implement –Maintaining Knowledge to implement –Monitoring the environment l In short: Active involvement needed!

11. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 11 of 25 Integrated Project Delivery Concept ● All stakeholders involved with delivery of a product work together collaboratively and simultaneously ● Clearly not traditional way, which is linear –Someone sets requirements for designers –Designers specify product for –Manufacturers, who try to build it –While some else worries about finances –Etc. l Process is rare, so far

12. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 12 of 25 Integrated Project Delivery Example ● Some companies have made systematic conscious efforts to develop forms of IPD… ● Lucent, around 2002/3 –Recognized need to be more competitive in delivery of its products (routing systems, etc) –Head of supply-chain group within company assigned some of his staff to work with all major sales teams –So that sales/product/and delivery aspects of implementation of could be integrated.

13. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 13 of 25 Integrated Project Delivery -- Value ● Ignorance – reduces likelihood ● Inattention – does not deal with ● Failure to plan ahead – reduces likelihood ● Stakeholder Block – Good! Should eliminate ● External Developments – does not deal with ● Overall: Good for coordination, removing stakeholder blocks – not enough by itself

14. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 14 of 25 Development of Game Plan Concept ● Designers should lay out the steps managers should take to implement each particular form of flexibility ● A necessary validation of any physical plan for implementing a design flexibility ● Needs a form of Integrated Project Delivery to be effective – not a purely physical plan –Example: Newcastle Hospital – designers did not have a good game plan because they failed to understand needs of financial side of project

15. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 15 of 25 Development of Game Plan Value ● Ignorance – reduces likelihood ● Inattention – does not deal with ● Failure to plan ahead – Good! ● Stakeholder Block – Good (with Integrated Project Delivery) ● External Developments – does not deal with ● Overall: Necessary, but not sufficient

16. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 16 of 25 Anticipating Developments Concept ● Implementation game plan may call for some advance non-design actions. Put another way, physical flexibility designed into the system may need legal or financial facilitation. ● Example: Development of secondary airports for a city –Not enough to have land and a design… –Also need political accord – or existing right –Thus Boston, Los Angeles maintain currently useless second airports to have the right to use them later if so desired

17. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 17 of 25 Anticipating Developments Value ● Ignorance – does not deal with ● Inattention – does not deal with ● Failure to plan ahead – Good! ● Stakeholder Block – Good (with Integrated Project Delivery) ● External Developments – does not deal with ● Overall: Necessary, but not sufficient

18. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 18 of 25 Ongoing Operational Actions ● In many ways, this is the more crucial part of implementation of flexibility ● Why might this be? ● Because … ● Designers who created flexibility are long gone by time it might be used ● Organization may lose track of flexibility ● Overall, flexibility can ‘waste away”

19. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 19 of 25 Maintaining right to implement ● The right to implement often depends on various permissions or political consents ● Can you think of cases? l Some examples: –Planning permissions for construction –Franchises and patents may need renewal –Other “use it or lose it” situations l A good way to maintain a right, is to use it l In general, maintenance requires effort

20. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 20 of 25 Maintaining Right Value ● Ignorance – mitigates ● Inattention – mitigates ● Failure to plan ahead – does not deal with ● Stakeholder Block – deals in part with ● External Developments – does not deal with ● Overall: Critical factor in some cases

21. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 21 of 25 Maintaining Knowledge to Implement ● Know-How may be crucial: Using Technical Flexibility may require specific knowledge ● Example: Tufts Dental School in Boston –Ability to add extra stories, provided for in original design, only practical with knowledge of structural and foundation details –They were lucky this was available 20 years later l How does an organization do this? –Maintaining people, “institutional knowledge” l Is money enough? –Motivation may be key

22. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 22 of 25 Maintaining Knowledge Value ● Ignorance – mitigates ● Inattention – mitigates ● Failure to plan ahead – does not deal with ● Stakeholder Block – deals in part with ● External Developments – does not deal with ● Overall: Often the Critical factor

23. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 23 of 25 Monitoring the Environment ● Effective use of Flexibility implies that it be used at the ‘right time’ ● Requires definition of “triggers” or conditions for appropriate use –These may change (as in parking garage case) –Depend on a conjunction of factors –This is not obvious ● Also requires an information system that –Collects relevant data –Connects data to persons capable of using ● This is not obvious!

24. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 24 of 25 Monitoring Environment Value ● Ignorance – mitigates ● Inattention – mitigates ● Failure to plan ahead – does not deal with ● Stakeholder Block – does not deal with ● External Developments – can do ● Overall: Always a Necessary factor

25. Engineering Systems Analysis for Design Massachusetts Institute of Technology Richard de Neufville © Implementation Procedures Slide 25 of 25 Take-Aways ● The Ability to use Flexibility in Design can easily be lost, due to –Ignorance and Inattention –Failure to Plan andStakeholder Block –External Developments Successful implementation requires a plan with both –Initial Preventative Actions –Ongoing Operational Actions No single method sufficient